Mastering Mastering Candlestick Candlestick Charts

Mastering
Candlestick
Charts 1
1
Disclaimer
It should not be assumed that the methods, techniques, or indicators presented in this book and seminar will be
profitable or that they will not result in losses. Past results are not necessarily indicative of future results. Examples in
this book and seminar are for educational purposes only. This is not a solicitation of any order to buy or sell.
HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS.
UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL
TRADING. ALSO, SINCE THE TRADES IN THIS BOOK and SEMINAR HAVE NOT ACTUALLY BEEN
EXECUTED, THE RESULTS WE STATE MAY HAVE UNDER OR OVER COMPENSATED FOR THE IMPACT,
IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING
PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE
BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS
LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.
The authors and publisher assume no responsibilities for actions taken by readers. The authors and publisher are not
providing investment advice. The authors and publisher do not make any claims, promises, or guarantees that any
suggestions, systems, trading strategies, or information will result in a profit, loss, or any other desired result. All
readers and seminar attendees assume all risk, including but not limited to the risk of trading losses.
Day Trading can result in large losses and may not be an activity suitable for everyone.
Copyright 1994-2007 by Pristine Capital Holdings, Inc. All rights reserved. Printed in the United States of America.
Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or
distributed in any form or by any means, or stored in a database or retrieval system, without prior written permission of
the publisher.
2
Table of Contents
Introduction
Candlestick Hype
Candle Benefits
Thoughts and Candle Language
Candle Basics
Individual Candles
Two-Bar Patterns
Three-Bar Patterns
Beyond the Basics

Pristine Candle Terms and
Understanding
Support & Resistance

Understanding Support and Resistance
A Deeper Understanding of Candles
Bar-by-Bar Analysis
Monitoring in Candle Language
Multiple Time Frames,

Volume and Indicators
General Understanding and Use
Candles in Action
Reading Greed and Fear in Candles

Combining the Candle Messages
Reversal Candle Potency
Candlestick Analysis
Cutting Through the Candlestick Hype
The signals on a bar chart are the same as a candle
chart.
Those signals will be seen at the same time and are
no more reliable than those of a bar chart.
The use of indicators will not increase the reliability
of candles.
There are no advanced candlestick patterns, but there is a deeper
understanding of price movements and that is the focus of The
Pristine Method.
So, why use candle charts at all?
Why Use Candlesticks?
Provides a visual picture of what is occurring.
Gives visual insights into others thoughts and expectations.
Gives visual confirmation signals of support and resistance.
Can visually align your thoughts with the market.
Can visually point to potential reversal points.
Can a bar chart do this? Yes, but you can do it faster with candles!
5
Candle Language Produces Thoughts
Proper trading is said to be proper thinking, but how do we know
what to think?
Pattern recognition is a recurring arrangement of price bars that
suggests the future movement of prices, which guides our thoughts.
These patterns communicate how traders have acted and what their
beliefs (expectations) are in that time frame, at the moment.
Candles provide a picture of those expectations on an ongoing basis.
Those pictures speak to us in Candle Language and are the basis
6
for our continuous thoughts and trading decisions.
Miscellaneous Thoughts on Candlesticks
Attempting to define the accuracy of candle names or patterns
without considering the trend, support and resistance is useless.
There are a least 50 different candle patterns, bullish and bearish.
Some memorize them, but you will see this is completely unnecessary.
While candles are very good at visually showing reversal signals,
the signals that do Not work are often the most powerful!
All that is needed is a chart of price bars -- all else is secondary.
While other analysis tools may add additional information, they
can only follow existing price action.
Candlestick
Basics
8
Candlesticks show the same O, H, L, C information as Western bars, but
the battle between buyers and sellers is visually clearer.
Open
on Left
Close on
Right
Range
The Range of a bar is the difference

between the high and the low
Range
Closes above the

Open = Green
Closes below the

Open = Red
Candle Bars
Tail
Wick
Close
Open
Body
High
Open
Body
Low
Shadow,
Wick or Tail
Shadow,
Wick or Tail
Close
The candle body is the difference between the open and the closing prices.
The part on either side of the body is called a Shadow, Wick or Tail.
10
Lets first review most individual candles and their names to
give you a background..
Remembering names is unnecessary because that will not
help you use candles or understand their meaning!
When we are done with this DVD, not only will you understand
what candles are saying, you will also:
Have a objective method of knowing when to enter
Know where to place a stop
Know how to monitor a position once in it
11
The Individual Candles
DOJI A bar with the open and close at or very near the same price
Gravestone DOJI A Doji with the open and close at the bars low
Dragon Fly DOJI A Doji with the open and close at the bars high
Long Legged DOJI A Doji with long upper and lower shadows
12
Spinning Top A bar with a small body and small range,
after a multi-bar move.
High Wave A bar with a small body and wider range, after
a multi-bar move.
Hammer A bar with a small body (red or green), long lower

tail, and small to no upper tail, after a multi-bar down move.
13
Inverted Hammer A bar with a small body (red or green), long
upper tail, and small to no lower tail, after a multi-bar down move.
Hangman A bar with a small body (red or green), long

lower tail, and small to no upper tail, after a multi-bar up move.
Shooting Star A bar with a small body (red or green), long upper
tail, and small to no lower tail, after a multi-bar up move.
14
Lets begin to simplify all of these prior candles.
Single Candle Questions:
Were the prior candles moving up or down?
Was there a tail on the top, bottom or both sides of the body?
Was the body relatively small in relation to the candle range?
Interpretation Momentum slowed down and there may have
been an increase in buying or selling.
15
As you can see, an individual
candle may or may not result in a
reversal.
High Wave
Long Legged DOJI
More information is needed for

them to be meaningful.
Shooting Star
DOJI
Shooting Star
Inverted Hammer
Spinning Top
DOJI
16
Two-Bar Combinations
Harami Cross Bullish A DOJI inside a large red body.
Harami Cross Bearish A DOJI inside a large green body.
Harami Bullish A small green bar inside a large red body.

Harami Bearish A small red bar inside a large green body.
17
Two-Bar Combinations Cont
On Neck Line Bullish A green candle that opens below the low
of a prior red candle (gap) and closes at the low of the prior candle.
Gaps
On Neck Line Bearish A red candle that opens above the high
of a prior green candle (gap) and closes at the high of the prior candle.
In Neck Line Bullish A green candle that opens below the low
of a prior red candle (gap) and closes at the close of the prior candle.
Gaps
In Neck Line Bearish A red candle that opens above the high of
a prior green candle (gap) and closes at the close of the prior candle.
18
Thrust Line Bullish A green candle that opens below the low
of a prior red candle and closes inside the prior red candles body,
but below the midpoint.
Thrust Line Bearish A red candle that opens above the high
of a prior green candle and closes inside the prior green candles
body, but above the midpoint.
Piercing Line Bullish A green bar that opens below the

low of a red bar and closes above the midpoint of the prior bar.
Dark Cloud Cover Bearish A red bar that opens above the
high of a green bar and closes below the midpoint of the prior bar.
19
Engulfing Bullish A larger green body engulfing
a smaller red body.
Engulfing Bearish A larger red body engulfing a

smaller green body.
Separating Lines Bullish A red candle followed by a green

candle that opens (gaps) at or near the prior candles open.
Close
Close
Separating Lines Bearish A green candle followed by a
red candle that opens (gaps) at or near the prior candles open.
Open
Gap
Gap
Open
20
Two Candle Combination Questions:
If a gap occurred, to what degree did it fail to follow through?
How far did the current bar retrace and close into the prior?
Was there a complete reversal of the prior candle?
Interpretation Momentum has shifted to varying degrees.
21
Two-Bar Combinations
Engulfing
Bearish
Two-bar combinations are an improvement

over individual candles at signaling reversals.
Engulfing
Bearish
Engulfing
Bearish Harami
Bearish
Engulfing
Bullish
Now lets look at

three-bar combinations
Thrusting
Line Bullish
Harami
Bullish
22
Three-Bar Combinations
Morning Star Bullish The first bar is a long red bar; the
second gaps below the prior body; the third closes well into the first.
Gap
Evening Star Bearish The first bar is a long green bar; the
second gaps above the prior body; the third closes well into the first.
Morning/Evening DOJI Star Replace Star with DOJI

23
Three-Bar Combination Questions:
To what degree did momentum slow and begin to shift?
To what degree did the next candle penetrate and close into
the prior candles?
Interpretation Momentum slowed down, reversed and there
has been an increase in buying or selling.
24
Evening
DOJI Star
The three-bar patterns are

Evening
considered more potent than
Star
the single or two-bar patterns
Morning
DOJI Star
25
Engulfing
Not all candles

will produce a
reversal, but they
all have meaning!
Harami Bearish
Inverted
Hammer
Engulfing
Evening
Doji Star
Engulfing
Some would say: Candle

messages occurring within a
consolidation are meaningless.
Piercing
Hammers
In time, you will see how they

offer very valuable information.
26
Shooting Star
Separating
lines
Harami
Bearish
At times, candle patterns

have No Follow Through
(NFT) to their suggested
DOJImeaning.
GBI
Engulfing
Bullish,
but GBI
Hammer
Engulfing
Bearish
High Wave
RBI?
Red bars ignored (RBI) and

Green bars ignored (GBI) can
provide powerful messages!
Engulfing
Bullish
27
27
The basics offered a good starting point for the
interpretation of candlesticks.
In the next sections, we are going to look at
candlestick analysis from the Pristine point of view.
A deeper understanding of candlestick analysis will
not only demystify them, but will also simplify their use.
28
Beyond the
Basics of
Candlesticks
29
Candlestick analysis is the

study of momentum
increases and decreases, which
may lead to a price reversal.
30
Common Candle Terms:
Engulfing Bar, Piercing Bar,
Dark Cloud Cover, Harami,
Thrusting Line.
Doji, Star, Hammer, Hangman
Pristine Candle Terms:

COG These have different levels of
penetration into the prior bars range
NRB, NB, BT, TT Different levels of
slowing momentum
WRB An increase in range or
momentum compared to recent bars.
Terms are unimportant, each candles message is.

Do NOT assume the outcome of the current candle and or message.
A candle is not complete until that time period ends.
The combination of candle messages will speak to you.
31
COG REVERSAL BAR
Bullish Reversals
Bearish Reversals
Pristine Tip: While there are different variations, the message is

always the same ! A reversal in momentum has occurred!
32
Narrow Range Bodies (NB)
Bars in which the body of the candle is small relative to the overall length
of the candle. They may have Tails on either side of the body.
The appearance of tails shows uncertainty in the prevailing trend of bars.
always the same ! A slowing in momentum has occurred!
Narrow Bodies
Narrow Body
Uncertainty
Certainty
33
Narrowing Range Bars (NRB)
A series of bars in which the difference between the highs and lows
is narrowing.
always the same ! A slowing in momentum is occurring!
Narrowing
Range Bars
34
Sell Setup
3 or more bars up
in downtrend.
Bearish Doji Star

Gapped up, and opened and
closed at the same price.
Bearish Shooting Star

Narrow range body with
topping tail, near higher
end of prior bar.
Bearish Harami
Opened near the prior
bars close, rose and fell
during the day, closing
with small real body.
Bearish Star
Gapped up, closing under open,
leaving a small real body.
Bearish Thrust
Gapped up and
closed down less than
half way into the
prior bars range.
Bearish Hangman
Narrow range body with topping
tail, near higher end of prior bar.
Bearish Piercing
Gapped up and
closed down over
into the prior bars
range.
Bearish Engulfing
Gapped up and fell
down to engulf the
entire prior bars real
body.
Prices are trending higher, the potency of the reversal signals are increasing.35
Buy Setup
3 or more bars
down in uptrend.
Bullish Doji Star

Gapped down, and opened
and closed at the same price.
Bullish Hammer
Bullish Harami
bottom tail, near lower end bars close, fell and rose
of prior bar.
Bullish Star
Gapped down, closing over open,
Bullish Thrust
Gapped down and
closed up less than
half way into the
prior bars range.
Bullish Inverted Hammer

tail, near lower end of prior bar.
Bullish Piercing
Gapped down and
closed over into
the prior bars range.
Bullish Engulfing
Gapped down and rose
up to engulf the entire
prior bars real body.
Prices are trending lower, the potency of the reversal signals are increasing. 36
Topping Tail Bars (TT)
Bottoming Tail Bars (BT)
Normal or wide range bars in

which prices had been higher, then
supply forced prices below the midpoint of the bars range.
Normal or wide range bars in

which prices had been lower, then
demand forced prices higher above
the mid-point of the bars range.
Pristine Tip: While there are different

variations, the message is always the
same ! Distribution has occurred, and
overhead Supply has been increased!
Pristine Tip: While there are different

variations, the message is always the
same ! Accumulation has occurred, and
Supply overhead has been removed!
Topping Tails
Bottoming Tails
Topping and Bottoming Tails bars that are also a Range Expansion
relative to prior bars have better odds of being an actual reversal point.
37
Has A Significant Shift In Momentum Occurred?
26.10
26.00
Potency is Increasing
25.90
25.80
Least Potent
25.70
Most Potent
25.50
25.40
25.30
25.20
25.10
20MA
As the size and number of candles that make

the reversal increase, the potency increases.
38
You now have an understanding of

some of Pristines terms and
interpretation of candles.
Now lets look at Wide Range Bars
and Potent Reversals, and consider
these candles' effects on emotions and
begin to think in "Candle Language.
39
Wide Range Bar (WRB)
A bar in which the candles body is relatively wide compared to
the most recent bars.
A Wide Range Bar after a period of low volatility ignites
momentum in that direction.
A Wide Range Bar after an extended advance or decline typically
happens near the end of a move. A NB or COG signals the turn.
WRB Ignites
WRB Ends
WRB Ignites
WRB Ends
40
Narrow
Range
Wide
Range
Range
Expansion
Range
Expansion
A Narrow Range bar can indicate that momentum has slowed or that volatility is low.
A WRB or RE bar displays commitment and emotion.
A Wide Range Bar (WRB) is a Range Expansion (RE) by definition.
A Bottom Tail (BT) or Top Tail (TT) may or may not be a Range Expansion (RE) bar.
A WRB is an indication that momentum may soon slow or end an existing move.
A WRB Breakout or breakdown, after a consolidation, ignites a move in that direction.
41
Not
Potent
Potent
The larger the reversal bar is in

relation to the prior bar, the more potent
Potent
Not
Potent
The level or depth of retracement into

the prior candle increases potency
Expanding range indicates Fear or Greed is increasing and becoming extreme

Expanding range (increased volatility) increases the odds of a reversal
Fear is
increasing
Momentum is
slowing, but fear
is not extreme
Momentum is
slowing, but greed
is not extreme
Greed is
increasing
42
-WRB
This is not climactic and the
reversal is not Potent
Range Expanded followed

by a complete reversal,
making it very potent!
No fear, just slowing momentum
Climactic and Potent
A retest of a this low has better

odds of a larger retracement
-WRB
Range Expansion after low

volatility ignites a move
+WRB
-WRB
Not climactic, but Potent
-WRB
43
Wide
Range
Bar
This Bottom Tail bar at (A) is also a Range Expansion
and was a Wide Range Bar (-WRB) prior to completion!
Range
Expansion
TT, BT
What were traders thinking when

the bar was forming as a WRB,
and then when it became a BT?
A
B
What are they

thinking after the
reversal at (C)?
C
What about the +WRB
at (B) becoming a TT?
44
Combine the Candle Messages

A signal bar, two-bar or three-bar candle pattern can point
you to high probability reversal points, but .
A combination of these candles in the same area will give a
stronger message of a reversal point.
By interpreting the meaning of all recent candles combined,
the odds of successfully locating a reversal increase.
45
At (A), An expanding range
breakdown is followed by an inside
narrow range bar (Harami)
Retest
At (B) A retest of that area is

followed by a Bottoming Tail (BT)
and Potent + COG (Morning Star)
Strongly suggests a move higher
AT (C), Narrowing Range Bars

(NR) are followed by a gap down
and move lower
At (D), a retest of the area is
followed by a minor gap lower and
Potent COG suggests a move lower
-WRB
Breakdown
Retest
+WRB
NB
BT
46
Notice how momentum increases
and decreases in a controlled manner.
The candles do not run higher
building into a climatic + WRB.
Potent?
This was a WRB

prior to completion?
Potent?
47
This is Not how you
want a BO to close
TT NB
Potent three-bar combination!

-WRB
Traders buy breakouts (BO).

A return back to a BO point is negative.
-COG Momentum Slows

-COG
NB
Momentum Slows
NBs
Momentum Slows
RE
Traders sell break downs (BD).

A return back to the BD point is negative.
NB
Expanding range break
down is followed by a
very potent + COG
48
As fear and greed increase, ranges expand
Range and
bodies contract
As fear and greed decrease, ranges and/or

bodies contract
When and where this occurs is key
Range expands after contraction
Potent?
Range expands after

multiple bars in one direction
Range and
bodies contract
49
As you can see, it is possible to understand what candles are
saying without knowing their various names and patterns.
Remembering candle pattern names does not equate to using
them successfully, but there is so much focus on them.
If you remember the patterns, fine; but you now see there is a
much easier, and better way.
The use of candles can not guarantee a successful trade, but
this deeper understanding gives much greater odds of success. 50
Concluding Thoughts
At this point, you have a great start to using candles. Now, its
up to you to work with the material and make it yours.
You should be able to analyze candle patterns objectively and
make intelligent trading decisions.
Defining an opportunity, where the odds are in your favor, then
having the discipline to follow your trading and money
management rules is all that you can do.
In closing, we at Pristine wish you great success!

51
Mastering
Candlestick
Charts 2
1
Disclaimer
It should not be assumed that the methods, techniques, or indicators presented in this book and seminar will be
profitable or that they will not result in losses. Past results are not necessarily indicative of future results. Examples in
this book and seminar are for educational purposes only. This is not a solicitation of any order to buy or sell.
HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS.
UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL
TRADING. ALSO, SINCE THE TRADES IN THIS BOOK and SEMINAR HAVE NOT ACTUALLY BEEN
EXECUTED, THE RESULTS WE STATE MAY HAVE UNDER OR OVER COMPENSATED FOR THE IMPACT,
IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING
PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE
BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS
LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.
The authors and publisher assume no responsibilities for actions taken by readers. The authors and publisher are not
providing investment advice. The authors and publisher do not make any claims, promises, or guarantees that any
suggestions, systems, trading strategies, or information will result in a profit, loss, or any other desired result. All
readers and seminar attendees assume all risk, including but not limited to the risk of trading losses.
Day Trading can result in large losses and may not be an activity suitable for everyone.
Copyright 1994-2007 by Pristine Capital Holdings, Inc. All rights reserved. Printed in the United States of America.
Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or
distributed in any form or by any means, or stored in a database or retrieval system, without prior written permission of
the publisher.
2
Table of Contents
Introduction
Candlestick Hype
Candle Benefits
Thoughts and Candle Language
Candle Basics
Individual Candles
Two-Bar Patterns
Three-Bar Patterns
Beyond the Basics

Pristine Candle Terms and
Understanding
Support & Resistance

Understanding Support and Resistance
A Deeper Understanding of Candles
Bar-by-Bar Analysis
Monitoring in Candle Language
Multiple Time Frames,

Volume and Indicators
General Understanding and Use
Candles in Action
Reading Greed and Fear in Candles

Combining the Candle Messages
Reversal Candle Potency
Cutting Through the Candlestick Hype
The signals on a bar chart are the same as a candle
chart.
Those signals will be seen at the same time and are
no more reliable than those of a bar chart.
The use of indicators will not increase the reliability
of candles.
There are no advanced candlestick patterns, but there is a deeper
understanding of price movements and that is the focus of The
Pristine Method.
So, why use candle charts at all?
Why Use Candlesticks?
They provide a visual picture of what is occurring.

They give visual insights into others thoughts and expectations.
They give visual confirmation signals of support and resistance.
They can visually align your thoughts with the market.
They can visually point to potential reversal points.
5
Candle Language Produces Thoughts
Proper trading is said to be proper thinking, but how do we know
what to think?
Pattern recognition is a recurring arrangement of price bars that
suggests the future movement of prices, which guides our thoughts.
These patterns communicate how traders have acted and what their
beliefs (expectations) are in that time frame, at the moment.
Candles provide a picture of those expectations on an ongoing basis.
Those pictures speak to us in Candle Language and are the basis
6
for our continuous thoughts and trading decisions.
Miscellaneous Thoughts on Candlesticks
Attempting to define the accuracy of candle names or patterns
without considering the overall pattern is useless and misleading.
There are a least 50 different candle patterns, bullish and bearish.
Some memorize them, but you will see this is completely unnecessary.
While candles are very good at visually showing reversal signals,
the signals that do not work are often the most powerful!
All that is needed is a chart of price bars -- all else is secondary.
While other analysis tools may add additional information, they can
only follow existing price action.
7
Candlestick
Basics & Beyond
Review
8
Candle Bars
Tail
Wick
Close
Open
Body
High
Open
Body
Low
Shadow,
Wick or Tail
Shadow,
Wick or Tail
Close
The candle body is the difference between the open and the closing prices.
The part on either side of the body is called a Shadow, Wick or Tail.
9
Lets first review some individual candles and their names to
make sure you have the background. See Intro to candles.
Remembering their names is unnecessary because that will
not help you use candles or understand their meaning!
When we are done, not only will you understand what candles
are saying, you will also:
Have a objective method of knowing when to enter
Know where to place a stop
Know how to monitor a position once in it
10
Sell Setup
3 or more bars up
in downtrend.
Bearish Doji Star

Gapped up, and opened and
closed at the same price.
Bearish Shooting Star

topping tail, near higher
end of prior bar.
Bearish Harami
bars close, rose and fell
Bearish Star
Gapped up, closing under open,
Bearish Thrust
Gapped up and
closed down less than
half way into the
prior bars range.
Bearish Hangman
tail, near higher end of prior bar.
Bearish Piercing
Gapped up and
closed down over
into the prior bars
range.
Bearish Engulfing
Gapped up and fell
down to engulf the
entire prior bars real
body.
Prices are trending higher, the potency of the reversal signals are increasing. 11
Buy Setup
3 or more bars
down in uptrend.
Bullish Doji Star

Gapped down, and opened
and closed at the same price.
Bullish Hammer
Bullish Harami
bottom tail, near lower end bars close, fell and rose
of prior bar.
Bullish Star
Gapped down, closing over open,
Bullish Thrust
Gapped down and
closed up less than
half way into the
prior bars range.
Bullish Inverted Hammer

tail, near lower end of prior bar.
Bullish Piercing
Gapped down and
closed over into
the prior bars range.
Bullish Engulfing
Gapped down and rose
up to engulf the entire
prior bars real body.
Prices are trending lower, the potency of the reversal signals are increasing.
12
The level of accumulation and

distribution will be seen through
candles displaying shifts
in momentum.
Those shifts take on various forms.
Your job is to recognize them and
assess the odds of follow through.
13
Narrow
Range
Wide
Range
Range
Expansion
Range
Expansion
A Narrow Range bar can indicate that momentum has slowed or that volatility is low.
A WRB or RE bar displays commitment and emotion.
A Wide Range Bar (WRB) is a Range Expansion (RE) by definition.
A Bottom Tail (BT) or Top Tail (TT) may or may not be a Range Expansion (RE) bar.
A WRB is an indication that momentum may soon slow or end an existing move.
A WRB Breakout or Breakdown, after a consolidation, ignites a move in that direction.
14
Shooting Star
Separating
lines
Harami
Bearish
At times, candle patterns have

No Follow Through (NFT) to
their suggested meaning.
DOJI
Engulfing
Bullish,
but GBI
Hammer
RBI
Engulfing
Bearish
High Wave
RBI?
Red bars ignored (RBI) and

Green bars ignored (GBI) can
provide powerful messages!
Engulfing
Bullish
1515
A signal bar, two-bar or three-bar candle pattern can point
you to high probability reversal points, but .
By interpreting the meaning of all recent candles combined,

the odds of successfully locating a reversal increase.
We will now consider the trend of current bars, support,

resistance, volume, and a monitoring technique.
16
Support and
Resistance
Basics
17
Candlestick analysis is a powerful tool that

becomes more powerful with the additional
understanding of Support and Resistance.
This introduction to Pristines systematic
approach to analyzing Support and
Resistance will give you a real advantage!
Lets take a look!
18
What is Support and Resistance?
The only real support or
resistance is price.
Prior highs and lows

Overlapping price bars (e.g., a base)
An unfilled gap between price bars
Subjective Support and Resistance

Trading Bands or Envelopes
Fibonacci Retracements
Moving Averages
Trendlines
These tools are subjective and unnecessary

when you understand what is real.
Pristine Capital Holdings, Inc.

19
Basic Support Resistance
The first reference of support is a prior candles low, so a bearish
candles low must be violated to confirm a bearish signal.
If that bearish candles high is overcome on a closing basis first,
the signal has been negated.
The number of bars making up prior support or resistance will
suggest the odds of overcoming or not overcoming that area.
Prior highs, lows, and gaps are focal points of potential reversals.
20
The Open = Beginning S / D
The Low = Demand, Support
The Close = Ending S / D

The High = Supply,
Resistance
The Body = The difference between the open and close, which is the
degree by which the battle between Bulls and Bears has been won or lost
High =
Supply
Close
High =
Supply
60%
40%
50%
50%
Body
Body
40%
60%
Open
Low =
Demand
Open
Close
Low =
Demand
The closing price within the range of a candle is a measurement

of the strength of the bulls or bears in that period.
21
Support and Resistance Analysis

The first point of support is the prior bars low.
The first point of resistance is the prior bars high.
The second point of support or resistance is a Pivot Point.
New First Resistance
First Resistance
Pivot High
LH
LH
HL
Pivot Low
HL
First Support
HL
HL
22
Support and Resistance Analysis

Multiple bars or congestion is a significant area of Resistance or Support.
They form rounding or square formations within a trend.
One-to-three bars reversals are less significant.
Congestion = Resistance
No
Resistance
No
Congestion
No
Congestion
No
Support
Retest
Pristine Capital
Holdings, Inc.
Congestion!
This is not support
until there is a close
decisively above it.
23
Gaps are considered support or resistance
reversal points, but it is not that simple.
Prices pull back into the gap with
several bars and form a potent + COG.
This pattern suggests a reversal.
GAP
Potent + COG
GAP
Prices exploded into the gap

with a + WRB suggesting
continuation, not a reversal.
24
Three or more bars moving into a Gap, followed by
slowing momentum, sets up up a high-odds trade
Read the candles as they form
Expanding
GAP
One or two bars

moving into a Gap on
expanding momentum
suggests continuation.
GAP
Slowing
25
B
TPM S-R
Concepts
B
Potent Reversal
-WRB
Igniting
As prices move sideways away from prior

support (A), it becomes less significant.
That sideways movement (B), once broken
becomes an area of supply to push prices lower.
26
Support and Resistance Questions

Support and Resistance
are areas, not exact points.
This fall leaves no congestion.

The retest pattern creates an
area of support.
Bullish new low reversal!
No
Congestion
Prices traded
above the
prior high
BT breaks the lows.

The BT at its lowest
point was a WRB!
Retest
27
Slight new low! 27
TPM covers trend quality and
trend reversals extensively
Broken
This reversal is very

significant and potent.
The breakout above
the prior high was
completely reversed.
Broken
Broken
Track prior highs 1st resistance,

then move to pivot reversal points
when they form as 2nd resistance.
Stay objective about the trend!
28
Support and Resistance Questions

Ask These Questions When Analyzing Support and Resistance:
Is it two bars or multiple bars of congestion?
What is the distance between Support and Resistance?
Has there been a break and/or close above/below a prior bars high/low?
Has there been a retest and/or break of a prior pivot high/low?
Are there any unfilled gaps that prices are moving towards?
What type of candles form as prices move towards support or resistance?
Objectively reading Support and Resistance is the key to chart reading.
29
Bar-by-Bar
Analysis or
Candle-by-Candle
30
Candles and Price Patterns Produce Thoughts
Once you have learned a candle pattern that suggests a future
result, it produces expectations for that result.
Expectations potentially lead to failure when it comes to technical
trading if they are not kept in alignment with current patterns.
Without a method to update new information as it occurs, your
expectations of the past will keep you there!
Bar-by-Bar Analysis is a Pristine tool that keeps you in the present.
31
Each Candle Produces New Thoughts!
Where is the next O, H, L and C in relation to the prior candle?
Once the current candle is complete, what does it communicate?
Does it confirm or contradict the prior candle or candles message?
Did that candle break and/or close beyond a prior high or low?
After each candle forms, ask yourself: Is this confirmation of the
prior bar or bars; is it weak or did it even negate it completely?
32
What does this two-bar pattern suggest?
Where is support?
Where is resistance?
What are the expectations of traders?
What would confirm those expectations?
What would change those expectations?
What would change those expectations to
a lesser degree, but still affect them?
33
Consider all of the marks to the
right of the bar as the point where
the next bars opening price was.
What would the various points
of opening suggest?
How would these various points
of opening affect expectations?
Might any of the openings bring
about an action by traders?
34
Now consider all of the marks to the
right of the bar as the point where the
next bars closing price was.
What would the various points of
closing suggest?
The stronger the close, the greater the
odds of follow through (continuation).
Can you see how different bars will
speak to us without thinking about
specific candle patterns and names?
35
Can you see how various combinations of opens and

closes speak to us about ours and others expectations!
Go Baby!
It gapped down near

the prior low and
then closed under it!
It opened ok, but closed

under the prior low, and
at the low of the day!
36
Retest of prior high
TT
Momentum begins to slow

in the area of the prior high.
A Narrow Body (NB) was
followed by a Topping Tail
(TT) candle, but a prior low
has not been overcome.
B
+WRB
The message is that price

might move lower
The third reversal at (A), was the most significant.

It formed a +WRB candle (B) and closed above the
prior highs.
37
B
A Topping Tail (TT) alone is not a

reason to take a short position, even
with prior resistance.
As you can see, a candles message

can be ignored completely!
It was not confirmed by trading
below the TT low either.
TT
At A, momentum slows, but a prior

bars low is not overcome.
At B, a move to a new high closed back
inside the range with a NB = Weakness.
At C, the first break and close below a
prior pivot low occurs.
The trend is sideways and may move

lower, but we need more information.
38
At D, the candles close is just less
than way into the red bar. Mark the
A
low after the next HL bar.
At E, a Top Tail forms in the area
of the prior failed new high at (B).
This confirms the resistance at B.
E
F
C
D
At F, a potent engulfing candle

confirms resistance.
The message is that selling is
increasing, but there is no signal to trade.
Let the candles guide your thoughts,

not your wishes or fears.
39
As You Look at a Candlestick Chart, Ask These Questions:
Where is the open in relation to the prior close?
Where is the close in relation to the open and prior close?
Are there tails? How long are they and what do they suggest?
What was the depth of penetration into the prior candle body?
Is momentum increasing or decreasing?
Were your expectations validated or is there now uncertainty?
Never think beyond the current candle.
40
Volume and
Multiple Time
Frames
41
General Volume Principles
An expansion in volume should be accompanied by an
expansion in the candle body range.
An expansion in volume accompanied by a contraction in the
candle body range may indicate a turning point.
Price movements with the trend ideally occur on increasing
volume.
Price movements against the trend ideally occur on decreasing
volume.
While these guidelines are the ideal, prices can move in the
direction suggested by candles without the above volume criteria.42
BT forms on
high volume
Range expansion
lower on high volume
NB forms on
lower volume
Small bodies form

on high volume
RBI NFT!
High volume
at support!
Break of a prior low!
43
Volume can be a helpful addition, but price
tells you what is happening and when to act.
Volume is secondary
Narrow Body (NB)
on high volume
Potent reversal forms

on higher volume
Bottom Tail (BT)

forms on high volume
Potent reversal
forms on high
volume
44
Volume is secondary to price and is never a reason to enter a
trade by itself.
If volume confirms price action, that is all well and good, but if
price action changes from the prior signal, do not ignore it.
At times, volume may be an early indication of a trend change
in price. Wait for that price change to occur before acting!
At times, price can and will make significant moves without the
ideal volume characteristics.
Remember . Price is king everything else is secondary!
45
Multiple
Time Frames
46
Using too many time frames typically leads to confusion.
Once you have formed a bias from a longer time frame and
have candle confirmation in the shorter, place the trade.
The time frame being used must be in alignment with your
money management guidelines.
Whatever the time frame you are using, the candle patterns
are relevant, in that time. Do not second guess them.
Changing time frames to stay in a trade is one of Pristines
Seven Deadly Sins; maybe the most deadly.
There is no such thing as a perfect time frame!
47
Narrow Body (NB) at
resistance, while extended
A breakout results in a
complete reversal that
trades under support.
Traders are caught
long
Daily
Intra-day
Develop your bias from the candle

The candle patterns in both time
pattern on a longer time frame.
frames are suggesting a pull back.
Then move to the shorter.
Now assess the reward-to-risk.

48
- -WRB breakdown
A second TT
candle forms that
closes under the
prior candles low
Potent COG followed
by TT candles on each
attempt to move higher.
Daily
Intra-day
Develop your bias from the candle Do the candles in the intra-day time
pattern on a longer time frame.
frame being viewed show a candle
Then move to the shorter.
pattern that confirms the longer?
49
Candles in
Action
50
We have covered many concepts

from the basics of candles to an
advanced method of monitoring
bar-by-bar analysis.
Lets review some of those
concepts together.
51
Traders got caught
trying to play an
oversold bounce!
Prices begin falling
Range Expands
Momentum slows
+ COG
BT
Retest and Potent Reversal

5252
TT & Potent Reversal
Range Expands,
Fear is increasing!
Momentum Slows
Stops are taken out followed
by an immediate reversal!
NL!
+COG
Range
Expanding BT!
The reversal bar closes near
the high of the red bars body
53
A NB (red TT), indicates slowing
momentum after a multiple bar move
Retest and Reversal (R&R)

Potent, Decisive
Reversal Bar
Short under the low,
stop above the high
-WRB after low volatility

ignites the move lower
Short breakdown or under
the low of the -WRB, stop
above the high
Void
Void
Gap Fill
RE and Reversal
54
Concluding Comments
Focus on the message of Candle Language, not the money.
If you focus on the money, odds are you will not see the patterns.
Once a pattern is complete and a position has been taken, monitor
bar-by-bar. This will keep you objective and in the present.
Trading is not about predicting; it is about recognizing what is
occurring in the moment, then accepting change as it happens.
55
A Few Words On Indicators
They are a derivative of price action, which cannot provide
more accurate or timely information than price.
They are useful tools for computers to search price action.
If you can read the message communicated by candles in the
moment, you will not need indicators.
If indicators take up more space on your chart than price,
hopefully the education learned here will enable you to change.
56
In Closing
This DVD is a great start to understanding price action.
If you have not taken a Pristine Seminar, consider it.
Success in anything comes from education, then practice.
Then focus on the development of your Trading Plan.
We will be happy to assist you further in order to help you
achieve the financial goals you have set for yourself.
57

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Beyond the Basics

Support & Resistance

Multiple Time Frames,

Reading Greed and Fear in Candles

The Range of a bar is the difference

Closes above the

Closes below the

Hammer A bar with a small body (red or green), long lower

Hangman A bar with a small body (red or green), long

Long Legged DOJI

More information is needed for

Harami Bullish A small green bar inside a large red body.

Piercing Line Bullish A green bar that opens below the

Engulfing Bearish A larger red body engulfing a

Separating Lines Bullish A red candle followed by a green

Separating Lines Bearish A green candle followed by a

Two-bar combinations are an improvement

Now lets look at

Morning/Evening DOJI Star Replace Star with DOJI

The three-bar patterns are

the single or two-bar patterns

Not all candles

Some would say: Candle

In time, you will see how they

At times, candle patterns

Red bars ignored (RBI) and

Candlestick analysis is the

Pristine Candle Terms:

Terms are unimportant, each candles message is.

Pristine Tip: While there are different variations, the message is

Bearish Doji Star

Bearish Shooting Star

Bullish Doji Star

Bullish Inverted Hammer

Bottoming Tail Bars (BT)

Normal or wide range bars in

Normal or wide range bars in

Pristine Tip: While there are different

Pristine Tip: While there are different

As the size and number of candles that make

You now have an understanding of

The larger the reversal bar is in

The level or depth of retracement into

Expanding range indicates Fear or Greed is increasing and becoming extreme

Range Expanded followed

No fear, just slowing momentum

Climactic and Potent

A retest of a this low has better

Range Expansion after low

This Bottom Tail bar at (A) is also a Range Expansion

and was a Wide Range Bar (-WRB) prior to completion!

What were traders thinking when

What are they

Combine the Candle Messages

At (B) A retest of that area is

Strongly suggests a move higher

AT (C), Narrowing Range Bars

This was a WRB

Potent three-bar combination!

Traders buy breakouts (BO).

-COG Momentum Slows

Traders sell break downs (BD).

As fear and greed decrease, ranges and/or